VIETNAM: Vietnam reacts to U.S. trade bill failure

Vietnam and American business leaders expressed dismay on Tuesday (November 14) after the U.S. House of Representatives failed to pass a bill establishing permanent normal trade relations between the former enemies. The surprise result raises the possibility that President George W. Bush could go to this weekend's Asia Pacific Economic Cooperation summit in Hanoi without delivering on a trade initiative his administration had made a major priority. "Without PNTR we will be subject to higher tariffs and quota barriers. It will reduce our competitiveness and so negatively affect Vietnam's exports. And also, we will not have the money to buy U.S. goods. I regret that this has happened, and hope that PNTR will be passed soon," said the first vice executive officer of the Vietnam Chamber of Commerce Hoang Van Dung. Vietnam Foreign Ministry spokesman Le Dung told Reuters the vote was "very regretful, and not suitable, and not serving the mutual interest and wishes of the peoples of the two countries". "We hope the House will be able to pass the PNTR for Vietnam at the earliest possible time," he said. Congress needs to approve permanent normal trade relations with Vietnam for U.S. farmers, bankers and other business to share in the market-opening benefits of Hanoi's entry into the World Trade Organization next month. The vote threatened to overshadow other efforts to ensure Bush's visit would be a success, including Vietnam's removal on Monday from the U.S. list of countries that violate religious freedom. The State Department cited an improvement in Hanoi's tolerance for religious expression, but critics disagreed. On the trade bill, supporters failed to get the two-thirds vote needed to approve it on the House "suspension calendar", usually reserved for non-controversial legislation. But since lawmakers voted 228-161 in favour, Republicans leaders were expected to try to win approval later this week through a procedure that requires only a simple majority to pass. It is still possible that both the House and the Senate could approve the bill before Bush is in Hanoi. On the streets of Hanoi, people were dismayed by the failure of the bill . "We wish to put the past behind and look forward to the future. I think, PNTR (Permanent Normal Trade Relations) is a good for both sides Vietnam and the United States, not only for Vietnam," said business school student Do Thu Thao. "I don't know what the reason, I really don't know why the House of Representatives did not pass the bill. I think they should reconsider it as nowadays, all countries should cooperate," said one student Do Thu Thao. "I very much wish Vietnam and the United States will normalise their relationship. With this move, our generation will be able to develop so that we are on par with people of other countries. At the moment in Vietnam, the country is still under developed in the eyes of the international community," said another business school student Nguyen Thu Trang. The chances of a Senate vote on the trade bill improved after Hanoi announced it was deporting a U.S. citizen convicted of plotting violence against the Vietnamese government. Senator Mel Martinez, a Florida Republican, had been blocking Senate action on the bill to win the release of Thuong Nguyen Foshee, who lives in his state and was in a Vietnamese prison for 14 months before she was convicted last week. The House vote showed many Democrats remain strongly opposed to trade agreements. Republicans supported the Vietnam bill by a two-to-one margin, but Democrats were almost evenly divided for and against the measure. The United States normalised trade relations with Vietnam in 1995 and signed a bilateral trade deal in 2001 that opened Vietnam's market to more U.S. exports. Two-way goods trade between the countries totaled about $7.8 billion last year, including $6.6 billion in imports from Vietnam. However, U.S. trade relations with Hanoi have remained subject to a Cold War trade provision that links favourable tariff treatment for products from several countries such as Vietnam and Russia to the rights of religious minorities to emigrate freely. Vietnam's WTO deal requires Hanoi to reduce tariffs on almost all U.S. manufactured goods and on nearly 75 percent of U.S. farm exports. Hanoi pledged to open sectors like telecommunications, financial services and energy to more U.S. and foreign firms. TRADE RELATIONS INTERNATIONAL TRADE

ITN Source | November 14, 2006

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